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Tesla faces competition for Model X after China's Nio releases car at half the price

Last updated: 16:19 18 Dec 2017 GMT, First published: 12:19 18 Dec 2017 GMT

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Tesla’s Model X has a new rival in China

Tesla Inc. (NASDAQ:TSLA) is set to compete with China start-up Nio in the production of mass-produced electric vehicles.

Nio has launched its first mass-produced model to rival Tesla’s Model X in China.

READ: PepsiCo reserves 100 of Tesla’s new electric Semi trucks, the largest-known order so far

The ES8 starts at 448,000 Chinese yuan (US$67,765), which is half the starting price of the 836,000 yuan (US$126,470) Model X in China.

Nio founder and chairman William Li told CNBC over the weekend that it was “hard to assume” how the ES8 will affect Tesla’s sales in China.

"Maybe Tesla will sell less ... after our product is out. Or probably, because the whole market is growing, they will still maintain growth in sales. It's hard to say,” Li said.

"But we do have lots of customers that turned to us from Tesla, and many who have bought buy products from both.”

The ES8 is made to order, customisable and equipped with an artificial intelligence system. The seven-seat vehicle will be able to accelerate to 100km per hour in 4.4 seconds.

Possible IPO in the US

The ES8 sports utility vehicle has a range of 500 kilometres on a single charge. Owners can charge the car by swapping batteries at power-swap stations in three minutes or by recharging through ‘Power Mobile’ service vehicles that travel to motorists.

Nio plans to build more than 1,100 power-swap charging stations and deploy more than 1,200 'Power Mobile' vehicles by 2020.

The Model X has a range of about 564 kilometres and can accelerate from zero to 60 miles per hour in 2.9 seconds.

Nio is reportedly considering an initial public offering in the US next year. However, Li said there is no specific deadline for an IPO, rather it will “depend on the development of the company”.

Tesla shares nudged 0.08% lower in New York at US$343.20.

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